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Economics
MEDIUM
ENGLISH
Economics
Which of the following is true regarding tradable pollution permits and Pigouvian taxes ?
A
All of these answers are true
Option A
Pigouvian taxes and tradable pollution permits create an efficient market for pollution.
Correct answer
C
Tradable pollution permits efficiently reduce pollution only if they are initially distributed to the firms that can regulator pollution at the lowest cost.
Option C
D
To set the quantity of pollution with tradable pollution permits, the regulator must know everything about the demand for pollution rights.
Option D
Correct answer: B
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